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LEASES
 12 Months Ended
Dec. 31, 2024
Leases  
LEASES

NOTE 7—LEASES

 

OmniMetrix leases office space and office equipment under operating lease agreements. The office lease has an expiration date of September 30, 2025. The office equipment lease was entered into in April 2019 and had a sixty-month term. This lease is currently month-to-month until the Company negotiates a new term. Operating lease payments for 2024 and 2023 were $129,000 and $128,000, respectively. The future minimum lease payments on non-cancelable operating leases as of December 31, 2024 using a discount rate of 4.5% are 98,000. The 4.5% used is the incremental borrowing rate (established at the commencement of the lease) which, as defined in ASC 842, is the rate of interest that a lessee would have to pay to borrow, on a collateralized basis, over a similar term and in a similar economic environment, an amount equal to the lease payments. Supplemental cash flow information related to leases consisted of the following (in thousands):

 

  

For the year ended

December 31,

 
   2024   2023 
Cash paid for operating lease liabilities   129    128 

 

Supplemental balance sheet information related to leases consisted of the following:

 

  

As of

December 31,

2024

 
Weighted average remaining lease terms for operating leases   0.75 

 

 

The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of December 31, 2024 (in thousands):

 

  

Year Ended

December 31,

2024

 
2025  $99 
Less: Imputed interest   (1)
Present value of operating lease liabilities (a)  $98 

 

  (a) One hundred percent of this amount represents the current portion for operating leases.

 

On July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc., to sublease from the Company 1,900 square feet of office space of the Company’s 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, for a monthly sublease payment of $2,375 (plus an annual escalator each year of 3%) which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays will be remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. As of December 31, 2024, after the offset of the investment in leasehold improvements and other expenses related to the sublease, the Company paid its landlord $7,000, respectively. The Company has paid a total of $16,000 for its share of the sublease profit since the lease commencement. The sublease commenced on October 1, 2021 and will run through September 30, 2025 which is the end of the Company’s lease term with its landlord. Below are the future payments expected under the sublease net of the estimated annual service cost of $3,000 (gross of the estimated amount expected to be remitted to our landlord):

 

Total undiscounted cash flows 

Year ended

December 31,

2024

 
2025  $22